Student discounts only work on computers, Apple software, and some Apple accessories.
Student discounts do not work on iPods, with the exception of the "Back to School" sale Apple does, where they give away (after rebate) an iPod with the purchase of a Mac.
If you're looking to save some money on an iPod purchase, check Amazon (or other online retailers). Most don't charge state sales tax, so that's a 3%-8% "discount" right there, and most offer the iPods for a few bucks cheaper than Apple.
The company I work with is partners with Apple, and therefore, we can go to the Apple Store and get discounts across the entire Apple product line, even iPods.